The launch and maintenance of a small business requires a great deal of time, patience, and capital. Though many aspiring business owners have the first two qualities in abundance, the last asset is harder to secure. Fortunately, there is a great deal of advice and a range of funding options available for those who believe they have the knowledge and the skills necessary for commercial success.
Ethel Nyembe, Head of Small Enterprises at Standard Bank, says most, if not all, entrepreneurs rely on lenders to provide the capital they need to open and maintain a business. This money will be used to cover the start-up cost of the enterprise, and also the operating costs, because it may take several months before you start turning a profit.
Below are the different types of funding for entrepreneurs to consider:
Khula, the government’s small business finance agency, offers what is known as a credit guarantee scheme. The scheme guarantees that the bank will be paid in the event that the business owner defaults on their obligation: up to 50% to 90% of the bank loan can be indemnified. The maximum amount that can be approved under the scheme is R3 million.
To qualify for a Khula-supported loan, you will need to invest some of your own capital or resources. This may be as much as 10% of the amount you want to borrow, and can be either cash or equipment.
2. Business Partners and Seda
Business Partners and the Small Enterprise and Development Agency (Seda) fund entrepreneurs, but they generally work with established businesses that want to expand.
3. Buying a franchise
The cost of a franchise ranges from R50 000 to millions. Many organisations let you pay part of the franchise costs out of profits, but they still require a large deposit.
Not all franchises are equal, and there are some unscrupulous operators who are simply in the business of collecting franchise fees.
Before you sign on the dotted line, call some existing franchise holders and find out about the average turnover, working hours and if the franchisor is keeping up their end of the bargain. Your bank is a valuable resource in this area, as they have specialised teams to deal with franchise banking.
If you do decide to invest in a franchise, follow these basic rules:
- Consider partnering with someone you trust and with whom you work well. Not only will this spread the risk, you’ll know the company is in good hands when you’re away.
- Get a lawyer to look at the contract.
- Ask the franchisor what the rules are if you want to sell your franchise to a third party.
- Ask to see their training manuals. If they don’t exist, reconsider the deal.
- Get a breakdown of the costs involved and proof that the concern is solvent.
- If you are unsure of the quality of the deal being offered, call the Franchise Association of South Africa (FASA) on: 011 484 1285.
A business plan is the cornerstone of a business. It articulates your objectives and focuses challenges and opportunities. With a business plan, you could possibly approach private investors. A good business plan is non-negotiable when approaching the bank for finance.
You may have a great product or service, but it takes time to accumulate income. You should have at least six months’ worth of living expenses in the bank in addition to your start-up capital. If the first months are lean, at least you won’t be worrying about your regular expenses.
Plan to eliminate all of your short-term debt and a big part of your long-term debt. The less you are forced to take funds from the business, the more capital you will have to grow it.
If you are approached for funding
If you are approached for funding by a friend or family member, ask them for a business plan and about their financial situation. Ask a lot of questions and assess if they have the right skills for the venture.
If you decide to lend money or invest for equity, you should:
- Be able to afford the investment to the point where if the business failed, it would not compromise your financial future;
- Draw up an official legal document stating what your role is; what their role is and their obligations to you, should the business fail or succeed.
- Be prepared to lose your money; and
- Be prepared to lose a friendship if you have not managed expectations on both sides of the transaction.
“Whether you are running a start-up or funding it, don’t be afraid to ask your business banker for help; they may have resources and ideas that can assist you in achieving your ambition,” says Nyembe. “While a nine-to-five job will give you security and a regular pay cheque, the rewards of being a business owner are worth the extra effort.”
With Hundreds Of Franchise Options Out There, Choose The One You Can Trust
If you’re looking to invest in a business venture that offers you years of experience in the industry, the trust and loyalty of its customers, and franchise support from an expert team – then Hi-Q is the one for you.
What you’ll become a part of
Since opening their doors in 1999, Hi-Q has gone from strength to strength, growing a humble three store enterprise into an extensive 130-store franchise network with a unique multi-product and multi-services automotive offering.
Hi-Q’s approach to business is centred around being ‘the one you can trust’ to their customers, their suppliers and their franchisees.
“That has always been the key driver in everything we do,” says Sean Harrison, Hi-Q’s Managing Director. “For example, when it comes to our customers, they need to know they can rely on us to put their safety first.
That we’ll always strive to offer them expert, friendly service and top of the range products, while also keeping up-to-date with the latest technologies and advancements in our field.”
An acclaimed and awarded brand
Hi-Q has again and again proven themselves to be a leader in the industry.
They’ve been voted South Africa’s No.1 tyre retailer for eight consecutive years (2010 – 2017) by consumers in the Ask Africa Icon Brands Survey, the biggest of its kind in Africa – a clear indication that they are respected and trusted by their customers.
Hi-Q Franchisees all have the support of an expert and knowledgeable team with years of experience in the industry, who are available to guide them on their business venture. This includes areas of business such as marketing/promotional, commercial, organisational structure, tools and equipment, sales and more.
Franchisees also have access to various skills training opportunities for members of their team.
Hi-Q is invested in providing their network with the tools needed to thrive and grow in an ever-challenging market.
Relationship with Goodyear
Hi-Q has the support and backing of international tyre of multinational premium tyre manufacturer, Goodyear, and its full value proposition. This means access to incredible promotional and marketing opportunities in partnership with the brand.
Hi-Q has embarked on an extensive expansion plan and have identified areas of opportunity to extend their Franchise footprint growth countrywide.
You’ll find more information on our website www.hiq.co.za We’d like to invite those who are interested to become part of our team to contact 011 663 2431 or firstname.lastname@example.org
Get The Edge This Winter
Five short courses from WITS kicking off in July will give you the competitive edge.
From Gauteng’s most trusted provider of the best learning experiences, come five WITS-curated courses starting in July 2019. Use the longer, colder days to curl up with a “good book” and emerge from winter with a new edge.
There are three online short courses offered via the WITS Digital Campus, starting 15 July.
Managing Labour Relations
This 10 week course will equip you with sound knowledge of South Africa’s complex labour landscape and an understanding of your legal rights as an employee or employer.
You will also learn skills for navigating employer / employee relationships successfully, and get tools for managing disputes effectively. There are eight modules, covered in online lectures over eight weeks, requiring a commitment of five to seven hours per week. The exam is in week 10.
Logistics and Supply Chain Management Practice
This 10 week course is packed with practical and theoretical information to help retail managers, supply chain supervisors, stock controllers and even CEOs drive efficiencies in the value chain.
It covers everything from improving exporting transportation, warehousing, order processing and procurement to financial management and managing waste. There are eight modules, covered in online lectures over eight weeks, requiring a commitment of five to seven hours per week. The exam is in week 10.
Applied Digital Marketing
We operate in an increasingly digital world and traditional marketing must include digital aspects and channels to be relevant.
This 10 week course will teach you to think digital, talk digital and deliver effective digital campaigns to elevate marketing and brand-building initiatives. You will learn to conceptualise and implement successful digital marketing strategies that drive customer acquisition, optimise your digital footprint and deliver business results.
There are eight modules, covered in online lectures over eight weeks, requiring a commitment of five to seven hours per week. The exam is in week 10.
Comprehensive onsite courses in July include:
Real Estate Investment Analysis
This intensive five day course is for people who have been introduced to the real estate discipline at NQF 4 and NQF 5 levels. It is designed to provide higher level, more focused training as well as tools for analysing different types of real estate investments at the individual asset level, and measuring investment performance.
The course will benefit property practitioners who do not have property degrees; past graduates of SAPOA programmes in different aspects of the real estate business and people from different disciplinary backgrounds considering entering the profession. The course takes place over five days from 1 to 5 July 2019.
Advanced Performance Management
Presented by the School of Accountancy together with Wits Enterprise, this course is designed to prepare students for the Association of Chartered Certified Accountants (ACCA) Professional level exams.
On completion of this course, you will be able to:
- Use strategic planning and control models to plan and monitor organisational performance
- Assess and identify key external influences on organisational performance
- Apply strategic performance measurement techniques in evaluating and improving organisational performance
- Advise on business performance evaluation as well as recognize vulnerability to corporate failure
The course will run from 15 July to 22 October 2019.
For more information on registering for any of these courses, criteria for registering, and costs, visit.
This article was originally posted on Entrepreneur.com/sa.
The Importance of Outsourcing Your Payroll
One of an organisation’s biggest overheads is that of salaries and wages. And yet, if these are not processed on time, it can negatively impact staff morale and create the impression that the company is not financially stable.
For a small business, payroll is normally the responsibility of an accountant or bookkeeper, but even administrators can sometimes be roped in to do the job, even though they have no expertise in the matter. This is where the value of outsourcing your payroll comes in.
When should you outsource?
- If you want to grow your business but are not aware of ongoing legislative changes that could pose a risk to your company, then it is better to get professionals to assist.
- Accountants and bookkeepers are not specialists and do not keep up with the compliance environment. If you outsource your payroll, you enable them to focus their core duties and not get bogged down by legislative complexities.
How to choose an outsourced service provider
Understandably, payroll is a sensitive subject dealing with highly confidential information.
This is often the last thing a small business owner wants to outsource. It is therefore vital that the company does its homework and researches the potential outsourcing partner thoroughly.
Instead of going with the first available service provider or the cheapest one, here are some questions to ask:
- Is the service provider a one-man band and, if so, what backup resources are available?
- Is the service provider a recognised payroll provider belonging to a professional body?
- Do they have the necessary training and skills on payroll?
- What does the service provider do to ensure it stays up to date with legislation?
- How secure is the payroll data and can the service provider take on historic data?
- How easy is it to recover your payroll data in the event of a disaster?
- What value-adds can the service provider offer? These can include anything from leave management and third-party payments, to employee self-service, time and attendance management, and any other related human resource service.
- Can they process salaries and/or wages hourly, weekly, fortnightly, or monthly?
- Can the service provider accommodate your growth requirements if you open new branches?
- Is the service provider able to assist with payrolls in other African countries, manage their currencies, and deal with their regulatory environments?
- What processes are in place to ensure the timeous processing of payrolls?
The advantages of outsourcing your payroll
One of the most obvious benefits of going the outsourcing route is freeing up your resources to focus on your core strategic objectives. This ensures you provide quality of service and control costs while an experienced partner takes care of your payroll.
Here are a few other benefits:
- Reduce operating costs.
- Statutory compliance and consistent service delivery.
- Access to the latest technology, as well as skilled and dedicated payroll resources.
- Access to a secure, risk-free and confidential payroll environment.
- Increased flexibility and responsiveness.
- Streamlined internal processes and procedures.
This article was originally posted on Entrepreneur.com/sa.